Steel giant ArcelorMittal posts fall in profits

The multi-billion steel empire of Lakshmi Mittal, Britain's richest man, has reported a fall in profits due to increased cost prices and reduced demand for the company's products.

ArcelorMittal, which manufacturers steel for the automotive, construction and packaging industries, reported that sales fell by 2.8 per cent to $21 billion (£13.3 billion) in the third quarter compared to the second quarter.

Its net income dropped from $1.7 billion to $900 million in the same period.
The company, which produced 6 per cent of the world's steel output in 2009, said total shipments in the third quarter amounted to 21 million metric tonnes, compared with 22.8 million metric tonnes in the previous three months, which it blames in part on seasonally lower volumes.

Britain's richest man: Lakshmi Mittal and his family topped the Sunday Times Rich List this year with an estimated wealth of £22.5 billion

'In Q3 the business performed towards the lower end of our expectations
against a background of seasonally lower volumes, weakening spot prices
and higher costs,' said chairman and chief executive Mr Mittal.

The performance of the company is seen as an important bellwether
for the global economy because its products are used by a variety of
industries.

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The company is cautious about its prospects in the fourth quarter as
its underlying earnings will be squeezed by at least 16 per cent
because operating costs will continue to increase due to higher raw
material prices and the average price at which it sells steel will
decline.

However it does expect to see a slight improvement in demand for its
products.
'Our outlook for Q4 remains cautious as the expected higher input
prices continue to work through the business and demand remains muted,'
Mr Mittal added.

Mr Mittal and his family topped the Sunday Times Rich List this year
with an estimated wealth of £22.5 billion. The company has operations
in more than 20 countries.